Exclusive: CMHC chief economist weighs in on foreign condo investment

Exclusive: CMHC chief economist weighs in on foreign condo investment

For the first time, CMHC released data on foreign condo investors in Canada Wednesday and in an exclusive with MortgageBrokerNews.ca, a CMHC economist shares some details behind the methodology used.

“Our main interest here is that foreign investors are one of those data gaps that everyone is wondering about and so we’re trying to do something to try to provide at least a piece of the puzzle,” Bob Dugan, chief economist at CMHC’s Market Analysis Centre told MBN. “So it’s probably not the perfect estimate of foreign investors and we’ll continue to work on this question but I think it’s a pretty good piece of information.

“So we thought let’s share what we have and that’s basically what we’ve done.”

The crown Corporation asked property managers to disclose the number of units owned by foreign investors as part of its most recent Rental Market Survey.

The results of the additional question reveal that foreign investment accounts for 1.1 per cent in Victoria, 2.3 per cent in Vancouver, 0.2 per cent in Calgary, 0.1 per cent in Edmonton, 0.3 per cent in Saskatoon, 0.1 per cent in Regina, 0.1 per cent in Winnipeg, 2.4 per cent in Toronto, 0.7 per cent in Ottawa, and 1.5 per cent in Montreal.

“We don’t actually call the person living in the units for the foreign investor (survey) – we’re calling the property manager,” Dugan said. “We ask them about the owner of the unit and it’s not necessarily the person living in the units.
“If someone lives in the unit and it’s the son or the daughter of the investor, we wouldn’t be contacting them; we would be contacting the property managers (and asking) who owns it and is their principle residence in Canada.”

CMHC contacted property managers in every condo structure that has three or more units -- a list of contacts that has been used to ascertain vacancy rates for years – and leveraged those sources to get a glimpse of foreign investment numbers.

It’s not the first time the corporation has tried to collect this data; though it is the first time it was confident enough to publish the findings.

“We have done some work that gave similar results but we didn’t publish it because we didn’t have enough faith in it,” Dugan said. “We (previously) went to land registry data and we compared the address of the property with the address to which tax assessments were sent and when it was different we figured that might be an investor.”